Who should file ITR for FY 2020-21 and How to file ITR is are the two most popular questions among taxpayers. Furthermore, many citizens aren’t aware of the benefits of ITR Filing.
Thus, In this article, we will discuss important things about ITR Filing that we all must know.
What is ITR Filing?
The Income Tax Return (ITR) is a document used by taxpayers to report their income generated and taxes due to the Income Tax Department. There are a variety of ITR forms that can be used based on the taxpayer’s source of income and the quantity of money generated.
ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 & ITR 7 forms are commonly used in Income tax return filing.
Let us now read some cases where it is a must to file ITR in 2020-21.
Who should file ITR for FY 2020-21?
Two different legal main responsibilities, tax payment and ITR filing exist. Tax payment and ITR Filing are different. Due to the fact that the extended due date for ITR filing (30 September) is rapidly approaching, here’s the list where one must file ITR for FY 2020-21.
- Firstly, If the total of all your income exceeds the basic exemption level, you must file an ITR. There are several age-related fundamental exemption limitations.
- Secondly, If you have beneficial interests in an asset outside of India, or if you have signing power over an account outside of India, you must submit an ITR, regardless of your income level. It even includes assets like stocks, bonds, or employee stock ownership plans (ESOPs) from an overseas firm.
- You have to file an ITR if you have deposited more than one crore rupees in one or more current bank accounts maintained with either bank or cooperative bank in India during the year. This does not just apply to cash deposits, but to all deposits, regardless of their form, in all current accounts.
- You must submit an ITR if you paid more than two lakhs for international travel of any individual, including yourself.
- Also, you must file an ITR if you paid more than Rs. 1 lakh in power costs throughout the year. Since the electrical connection does not have to be in your name to qualify, you must file an ITR even if you are renting a house or workplace.
Essential points to keep in mind before filing ITR this year
- You have to file ITR and pay tax on the basis of age as an individual. For example, If your taxable income exceeds Rs. 2.50 lakhs and your age is less than 60, you must pay tax. Exemption of up to Rs. 3 lakhs is available to those who are above 60 but under 80. Elderly people above the age of 80 get a free income of up to Rs. 5 lakhs each year.
- Even with a $0 balance outside of India, you still need to file your ITR in the country.
- Choosing a new taxation system might help. The new tax system may provide you with a lesser fiscal responsibility when you have not made any tax-saving investments and have no gross income deductions.
- You do not have to file ITR if foreign travels were to neighbouring countries or for religious purposes.
To know more such essential points, you can visit – Essentials point to keep in mind before filing ITR this year
What are the benefits of filing ITR Online?
Filing an ITR is a great way to get many benefits:
- Avoid Penalty Up to INR 10,000/-
- Avoid Tax Notice of Non-Filing of ITR – If you fail to file your Income Tax Return in a timely manner, the Income Tax department may send you a tax notice. This could land you in serious trouble and damage the reputation of your business. It is better to complete the ITR filing process promptly.
- Your client or employer may have deducted your TDS when you made payment. ITR Filing may make you eligible for Tax Refund. You can claim your TDS credit when you file Income Tax Return and receive a refund of any excess TDS that was deducted from your net tax liability.
- When approving a loan, the bank or financial institution will require you to submit an Income Tax Return. The Income Tax Return reveals your financial credibility, which will help you approve the loan quickly.
- You can save taxes by timely filing your income tax return or carry forward losses.
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